RSM Staff Writer

Emerging technology, a tight labor market and increasing talent competition from other sectors are among the biggest factors reshaping the landscape of the financial services workforce. In the highly regulated finance space, entry-level financial services positions are getting tougher to fill and higher-level roles are evolving in terms of how they fold in technological tools and capabilities.

Financial services organizations have many challenges to contend with when it comes to developing a robust workforce for an increasingly digital future. Three areas of critical importance are:

  • Adapting to resource shortages.
  • Improving talent attraction and retention.
  • Developing a digital talent experience.

Here is a look at each of these areas.

Adapting to Resource Shortages
The labor market has cooled some, but it is still expected to remain tight, by historical standards, for the foreseeable future, as noted in January by the RSM US Middle Market Business Index (MMBI) special workforce report. Two-thirds of those who responded to the fourth quarter 2023 MMBI survey, which aggregated the responses of 403 senior executives across a range of middle-market companies, said they expect their organizations’ overall hiring levels to increase over the next six months. That’s the greatest seasonally adjusted percentage in any quarter since the MMBI launched in 2015.

Contrast those hiring intentions with the fact that two-thirds of respondents said they expected a degree of difficulty staffing open positions over the next 12 months. That number, while down from 83% a year earlier, still represents a sizable majority.

Even with banks reportedly cutting jobs in 2023, financial services companies still face challenges hiring for more tech-focused roles such as those that deal with data analytics and information technology.

A shortage of skilled, value-adding workers should motivate organizations to invest in technology that will improve their productivity and increase their resilience. Advanced capabilities that can help protect profitability, especially for small and midsize organizations, include:

  • Automation strategies.
  • Modernized cloud platforms.
  • Large language models.
  • Managed services and outsourcing.

Improving Talent Attraction and Retention
Organizations need to assess what actions they can take to make positions more appealing, especially for entry-level roles. Compensation and benefits top this list and remain foundational to human capital management efforts, according to the MMBI workforce report. Other talent experience components such as flexibility, workplace culture and professional development are also shaping the labor market.

We anticipate that more organizations will formalize hybrid work policies and balance their desire to bring back in-person contact with employees’ desire for flexibility. Companies must be intentional about employee retention strategies; those that fail to prioritize investing in their talent base will be vulnerable to competition.

Developing A Digital Talent Experience
Strategic technology investments will be paramount for organizations to gain a competitive edge. Technology must be more effectively embedded in the day-to-day aspects of employees’ roles because it needs to drive more efficiency in the face of fewer available workers.

As generations become more tech savvy, employees will have higher expectations for organizations’ digital tools, systems and processes. Companies that don’t prioritize these areas will fall behind.

Upskilling or reskilling employees in areas adjacent to their current roles can help organizations do more with less. For instance, some banks are reskilling tellers to become universal bankers, which involves taking on responsibilities beyond a teller’s predominant focus of accepting deposits and cashing checks. By reskilling such roles, the bank enables employees to support more branch operations and overall growth.

That reskilling, especially when it involves advanced technologies, can prevent employees from falling behind the curve when compared to the broader labor market. In turn, this enables financial institutions to have a more future-focused strategy.